Zoom announces 1,300 layoffs, CEO cuts salary by 98%
Zoom enters, in turn, the sad ball of layoffs. The online video conferencing platform is forced to cut costs and will cut 15% of its workforce. Chairman and CEO Eric Yuan issued a memo to employees on Tuesday, February 7, reports CNN.
Zoom management recognizes “errors”
All sectors of the company will be affected by the job cuts. In total, the company’s plan provides for the dismissal of 1,300 people. In his message, Eric Yuan acknowledges having made mistakes during the company’s strong growth period, which coincided with the Covid-19 pandemic.
“As CEO and Founder of Zoom, I am responsible for those mistakes and the actions we take today — and I want to demonstrate accountability not just in words but also in my own actions. To this end, I am reducing my salary by 98% for the next fiscal year and forfeiting my company bonus for fiscal year 2023“, indicates the CEO of the group, who announces in parallel a reduction of the base salary of the executives of the company by 20% and the elimination of their bonuses.
For its part, Wall Street hailed the group’s austerity plan. Zoom stock traded up almost 10%.
During the pandemic, “Zoom has tripled in size“
During the Covid-19 crisis, many companies closed their doors, forcing their employees to telecommute. A blessing for Zoom and its software dedicated to videoconferencing. The company thus experienced a historic increase in its turnover in 2020. An explosion in demand which led the company to quickly recruit a large number of employees. “In 24 months, Zoom has tripled in size to handle this demand while enabling continuous innovation“, assures Eric Yuan.
With the gradual return to the office of employees in recent years and the lifting of confinements around the globe, the use of videoconferencing has fallen. A significant loss of profits for the company which is now forced, like many large American technology groups, to drastically reduce its operating costs.